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McGraw-Hill Cos. will sell its education unit, which employs about 1,100 workers in central
Ohio, to Apollo Global Management for $2.5 billion, the two companies say.

The deal concludes an effort begun more than a year ago, when McGraw-Hill began splitting off
the educational operations from its financial properties.

The new McGraw-Hill Education, which produces printed and digital products for kindergartners to
college students, includes three locations in central Ohio.

“There are no layoffs planned as a direct result of the sale,” Buzz Waterhouse, chief executive
of McGraw-Hill Education, said in a statement. “However, we are continuing to evaluate every facet
of our business as we strive to make a stronger, faster company in a challenging marketplace.”

In late 2007, McGraw-Hill employed about 1,400 workers locally. The company recently closed its
Easton office and consolidated operations at its Polaris location.

Apollo is a large investment manager, with assets valued at more than $105 billion.

“We look forward to leveraging the company’s leading portfolio of trusted brands and innovative
digital-learning solutions to drive growth through the ongoing convergence of education and
technology on a global basis,” he said.

Increasing its digital presence will be a key to the education unit’s success, said Michael
Corty, an equity analyst with Morningstar.

“We’re in a transition period,” he said, with more educational assessment and learning materials
being produced digitally.

The British firm Pearson is ahead of U.S. competitors McGraw-Hill and Houghton Mifflin when it
comes to digital products, Corty said.

“There is room for growth, and to grow their market share as (McGraw-Hill) transitions to
digital,” he said. “I think it was wise of Apollo to invest in this growth potential ... and I
think they will increase the level of investment in the company.”

In recent years, school districts have had to make cutbacks, spending less on educational
materials.

“At the end of the day, education is so important,” Corty said. “And I think further cutbacks in
this area are at less of a risk than in other areas of government.”

McGraw-Hill said it will realize $1.9 billion from the deal with Apollo, after taxes and certain
adjustments.

The newly formed financial company will be called McGraw-Hill Financial. It will include
Standard & Poor’s credit-rating service, Capital IQ tools for financial analysis and Platts, a
commodity-market information-services company.

McGraw-Hill originally discussed spinning off ownership of the education business to its
shareholders. However, after reducing its staff in the education business and doing much of the
work to legally divide the company, the board considered bids from private equity firms to buy it
outright.